News Local Joint study claims Gateway bad for economy

A joint study from the Alberta Federation of Labour and the Parkland Institute of Alberta have released a study arguing the province could lose billions in royalty revenue if the proposed Northern Gateway pipeline is built.

The report's authors defend their claim by examining projected royalty payments between 2011 and 2045, using data collected from the Canadian Energy Research Institute. The report's authors compared those numbers to the royalty system that existed under former premier Peter Lougheed, who held office between 1971 and 1985.

Under Lougheed, 35% of Alberta's oil revenue was captured by royalties during the 1980s. The study argues if that system was still in place, the Alberta Heritage Fund could be as large as $1 trillion by 2045, not including any income earned through investments.

Under the current royalty model, secretary-treasurer of the Alberta Federation of Labour Nancy Furlong says Alberta will collect an average of 18% from oilsands revenue between 2012 and 2045.

"That's an extra billion missing," she said. "Under the old system, that means total royalty would be worth $2.2 trillion during that period, based on CERI's numbers."

Furlong acknowledges that lower royalty payouts mean the province would still be missing out on royalties that existed in the 1980s, even if Gateway is not approved. However, she argues the province's economy will still suffer if Enbridge's proposed pipeline is built.

"Gateway will ship thousands of upgrading and refining jobs to the Chinese, taking jobs away from Canadians. It will only leave 104 permanent jobs for Canadians, most of them in B.C. Other jobs surrounding construction of the pipeline will be mostly part-time or temporary labour," she said. "We're not opposed to a pipeline, but any discussion surrounding one has to include getting our fair share."